Geneva Generates Protest

Town Challenges Cost Of Freedom From Edison

January 22, 1986|By George Papajohn.

With many Illinois municipalities, including Chicago and Naperville, watching closely, the far western town of Geneva is challenging what it considers an anticompetitive charge by Commonwealth Edison Co. for

transferring electricity from Wisconsin to Geneva`s lines.

Geneva, which is to begin buying its electricity from the Wisconsin Electric Power Co. on May 1, is the first of five northern Illinois towns, all of which own their electrical distribution systems, that will not purchase its power from Edison.

Edison is asking that Geneva pay $8.93 per kilowatt per month as a

``wheeling`` charge for bringing the electricity from Wisconsin to Geneva over Edison`s lines. But Geneva says the highest the rate should be is $2.05, and it has challenged the charge before the federal Energy Regulatory Commission, which may take up the case at the end of the month.

Richard Lewis, Geneva`s mayor, has accused Edison of using the high wheeling rate to punish the town for abandoning the company`s services and to discourage other towns from doing the same.

``Edison wants it the rate so high nobody will think about leaving the system,`` Lewis said. ``The case is overwhelming in its implications.``

Edison officials would not comment on the case.

``The Geneva case will be an important precedent,`` said Jeff Paulson, an attorney specializing in utility law. ``Edison has been trying to do anything it can to prevent municipalities from seeking alternative sources of power.`` The decision by the federal commission on the Edison rate also could set a national standard for wheeling charges, thereby affecting the options of communities throughout the country, observers said.

In Illinois, Paulson said, the wheeling charge issue has drawn the attention of more than just the towns owning electricity distribution systems. The city of Chicago has been studying the idea of forming its own utility so it can generate at least some of its power or purchase it from sources other than Edison. Chicago accounted for about a third of Edison`s revenue in 1985.

Paulson said several suburbs also are looking at the option of abandoning Edison, as are private industrial users.

Naperville, which has a population of 64,700 and is Du Page County`s largest city, already has its own distribution system and will buy about $28 million worth of power from Edison during the coming fiscal year.

In all, the five northern Illinois cities with distribution systems

--Batavia, Geneva, Naperville and St. Charles in the far western suburbs and Rock Falls in the western part of the state--purchased about $55 million in power from Edison in 1985. Naperville, Batavia and Rock Falls have joined Geneva in challenging Edison`s wheeling rate.

Rock Falls, which is scheduled to disconnect from Edison in July and purchase electricity through the Illinois Municipal Electric Agency, has a special interest in the case: It has been assessed a wheeling rate of $8.27. Roy Thilly, the attorney for Rock Falls and Geneva, is asking that the Energy Regulatory Commission consolidate the motions of the two towns.

The Illinois Municipal Electric Agency also is intervening on Geneva`s behalf. The agency, which consists of 28 towns, was set up two years ago to buy electricity from sources other than Edison and sell it to its members.

For that agency, the wheeling rate represents something of a toll for allowing electricity to travel on Edison`s system. ``If you can`t get on the highway, you can`t distribute the goods,`` Gary Zimmerman, the agency`s general manager, said.

Geneva, which has a population of about 10,000, had hoped to save $20 million over 10 years by switching to the Wisconsin Electric Power Co., but it may have to back out of that contract if Edison`s wheeling rate is not lowered.

Initially, the city is asking that Edison reduce the $8.93 rate, which was filed in November, by $4 because Geneva will not need Edison as a back-up in emergencies or times of high use. Lewis said the city has arranged for the Wisconsin utility to serve as its agent to find power during such times.

Mayor Lewis said the federal commission`s decision and the tone of that decision on this issue will give the city a strong indication on its chances of winning the case. The commission`s final decision can be appealed in court. This is not the first time Geneva has taken on the utility giant. For years, along with Rock Falls, Naperville, St. Charles and Batavia, the city appealed rate increases by Edison.

Finally, in 1984, an out-of-court settlement gave the towns a refund and affirmed their right to have electricity from sources other than Edison transmitted across Edison`s lines. It did not, however, set that transmission rate, the current focus of the continuing conflict.

``Depending on which way it goes, history will say that was the battle that determined the war,`` Lewis said.